A Bull Market in Stock Bashing and 12 Stories from New Cannabis Ventures

This is a copy of the May 6th edition of our weekly Newsletter, which we have been publishing since October, 2015.


With so much interest in the the cannabis sector,  we have noticed an increase in the number of bearish pieces on publicly-traded companies on platforms like Seeking Alpha. This week, for instance, an article called for an 80% decline in Namaste Technologies. The same writer, “Grumpy Bear Research”, took a shot at Isodiol International in the prior week. Many of the leading LPs in Canada have been the subject of these attacks as well, including, most recently, Aphria.

We aren’t going to weigh in on the validity of the arguments made or our views of these companies, but we do want to discuss the bigger picture. Many, though certainly not all, of these articles are very well researched and bring out information that is new to many investors in the company, often a reflection of the lack of due diligence done by retail investors and the void in negative research published by the Canadian investment banking firms that cover the space.

While many investors don’t like to see the companies in which they have invested presented negatively, we think it is healthy and reflects a maturation of the space. No company is without flaws, and knowing both sides of the story makes an investor better informed about his or her investment. Additionally, when publicly criticized, a management team will often address a valid point by improving the way it conducts itself. At the same time, investors should be careful to understand the nature of these articles, which, just like bullish pieces, are designed to move the stock price. More often than not, the author is anonymous, which adds a layer of complexity to evaluating the information. We understand why some writers choose to be anonymous, but the lack of transparency is a big cost to doing so in our view.

Our view is that investors should welcome responsibly written articles that have negative conclusions. One of the things we hear most often about from our readers is their gratitude that we are willing to publish negative stories on companies. Many in the cannabis-centric media want to focus only on the positive, but we see a vital need to call out questionable activities. Our industry, not surprisingly given its promise, attracts many inexperienced investors and many charlatans, a dangerous combination. Our readers can count on us to continue to spotlight companies and people who demonstrate unethical practices.

While we feel a responsibility to call out bad actors, we also relish our position to be able to spotlight the many entrepreneurs and investors who are innovating and building dynamic companies that are helping to advance our industry. This year, we have already published 19 interviews with the CEOs of public and private companies in the United States and in Canada, with more ahead.

Full Cannabis Retail Compliance at Your Finger Tips 

Learn more about how Cova’s cannabis retail software helps solve some of the biggest challenges in the cannabis industry. To follow the company’s progress click the “Learn more info” button via their page on New Cannabis Ventures.

New Cannabis Ventures publishes curated articles as well as exclusive news. Here is some of the most interesting business content from this week:

To get real-time updates download our free mobile app for Android or Appledevices, like our Facebook page, or follow Alan on Twitter. Share and discover industry news with like-minded people on the largest cannabis investor and entrepreneur group on LinkedIn.

Use the suite of professionally managed NCV Cannabis Stock Indices to monitor the performance of publicly-traded cannabis companies within the day or over longer time-frames. In addition to the comprehensive Global Cannabis Stock Index, we offer a family of indices to track Canadian licensed producers.

View the Public Cannabis Company Revenue Tracker, which ranks the top revenue producing cannabis stocks that generate industry sales of more than $2.5m per quarter.

Consider subscribing to 420 Investor, Alan’s comprehensive stock due diligence platform since 2013 for more in-depth information and market intelligence about the publicly traded cannabis sector, including insights into Canadian, American, German and Australian opportunities.

Alan & Joel

Exclusive article by Alan Brochstein, CFA
Alan Brochstein, CFA
Based in Houston, Alan leverages his experience as founder of online community 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email

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